It’s an inheritance one!

[Sadinside]

Sadly FIL died last year after a truly harrowing illness. He left DH and SIL each 40K. MIL has never really been involved with money, having always kept that as FIL’s domaine - bit old fashioned. The will was old - 20 years old. DH suggested MIL quickly got bank statements together to tot up value of savings and assets - as he was executor. The initial tot up came back as 120K. This would mean once DH and SIL were paid out - she’d have the house (worth about 300K plus 40K savings) - she’s 72 and in good health. DH asked me what I thought, and my immediate feeling was that both siblings should really hand back the will to MIL in order to give her savings and home options (she was talking about moving into a modern house). Papers were signed handing back the money to MIL. Everyone happy. Fast forward about a month, the solicitor is undertaking bank searches and unearths 200K that MIL had no idea about. Suddenly she’s a wealthy widow. No parent / child discussion about giving back the inheritance to anyone. Covid hits, DH has pay slashed, we can’t afford our mortgage and are selling up to move to a much smaller house. The inheritance would have kept our house. MIL In the meantime declares she’s staying put in the old big house. I’ve spoken to no one about this because I feel a bit ashamed of feeling pissed off at an elderly grieving lady. Ive not told DH that I feel his mum has acted a bit sneakily ...but that actually is how I feel. AIBU to feel kind of diddled? The money’s not mine, I’ve never banked on anything but I know in same position I wouldn’t do that do my own kids! Do I need to mentally let this go? We move in August and I just find myself avoiding MIL on phone, I can’t feel the same way about her having previously got on pretty well for years.

@jockjockjock Do you think your post sounds bitter or jealous?

I never had a penny from my parents as they were and are poor. But I am able to help my DCs and that's a personal choice, as it is for many families.

@Jingling
No, I’d just rather have my parents than any money I’ll inherit when they die. I also like to stand on my own two feet.
If anything this thread almost makes me glad that we’ve never had much money to fight over.

This squirrelling money away is quite common. I used to work in a BS, the amount of times I met (usually older) customers with hundreds of thousands in their account, and they’d turn up dressed scruffy and a mess.

My fil is the same.

YABU to feel diddled - it was your idea!

For others saying about hanging onto money - my Aunt died a few months ago and her care home fees over 4 years came to £220k.

If she does end up gifting you all the £40k be aware that if she dies within 7 years it will be included in the IHT calculation.

No, I’d just rather have my parents than any money I’ll inherit when they die

And you think you are different to anyone else with those thoughts?

Do you honestly think there is ONE single post here saying otherwise?

If you want to look gift horses in the mouth if your parents were able to offer help, up to you, but don't knock parents who can afford to help their kids out. There is no moral high ground reserved for people who turn down gifts.

As far as I am concerned, when either me or dh dies, the other will inherit everything.
When we die, everything will be split between our two kids. Thankfully, we both agree in this.
I think your fil was unreasonable in the first place.

Tell her!! Ask for help!

You need to ask her for help.I'm not saying your MIL shouldn't help you - I'm saying that OP is BU for resenting her for not offering when she doesn't seem to know anything about the circs.

I'm in a position to help out my kids, I hope, but if they were working, had a house, family etc. and seemed to be doing okay in everything then I probably wouldn't think about giving them large sums of money pre-inheritance when I'm in my 70s. Particularly if I'd already paid for uni, helped with rent, helped with a deposit for first house etc.over the years.

In fact I'd probably be glad to be comfortable knowing that they wouldn't ever have to pay for my care and that they one day would inherit well if it wasn't all used up on care fees.
My aunt is about to move into a care home and the sale of her £300k house and her £50k savings pot will cover just 4 and a half years. She doesn't even need particular medical care. Decent care is really expensive.

@Sadinside Do come back and update us when you're DH has talked to his mum, be interested to hear the outcome.

@Liverbird77 And if doing this meant your estate was subject to IHT, you're quite happy to hand that over to the tax man when alternative planning could mean that might be avoidable?

@Liverbird77 I'm with you and as for those saying 'you're quite happy to hand that over to the tax man' Wills can be changed when circumstances change. Right now everything goes to DP and I trust Dp to them make decisions regarding the kids and vice versa.

In 30 years time if we're both still around and our estate is subject to IHT then we'll deal with that accordingly.

@Lochroy If you die within seven years, the money is taxable anyway.
I wouldn't be comfortable handing over huge amounts because I might need that money to pay for care fees/to live comfortably. That's not saying for a minute I'd ever let my children go without.

If you die within seven years, the money is taxable anyway.

Not necessarily, it's really not as simple as that.

If you die within seven years, the money is taxable anyway
.
@Liverbird77 You're confusing money stuff!

The 7 yr thing applies to someone giving away money to purposely avoid being up to the threshold for care home fees (currently the threshold is around £23K.)

It's got nothing to do with the recipient being taxed.

The council can look at bank accounts if someone needs care, or a reduction in council tax, to check their savings. If they have given away huge chunks it may be investigated if it looked as it was to avoid care home fees.

The recipients are never taxed on it.

Also @Liverbird77
If you need care and have no savings, and no house to sell to raise money, you would go into a council run care home that was free (they'd take part of your state pension .) if you have assets over £23K they are used up first. if you have assets, you can choose your own care home and pay for it. If your money runs out, you can transfer to a council owned care home or sometimes a private care home will do a special offer.

It's sad situation that people who have never saved get free council care homes and people with assets have to sell them and get private care.

You can get round selling your house to pay for care by getting your children as tenants in common. (a legal process.) This means the house is theirs in part and it can't be sold to fund care.

Not being rude, but you do need to up your game in terms of financial knowledge.

Ok, well maybe I've misunderstood the information on the gov.uk website.
I thought you could freely give £3000 a year, no problem, but if you die within seven years of giving a larger amount (over 300k I think) then inheritance tax is owed.

If she doesn't know why you are moving, how can she help ?
She's not a mind reader.

@Jockjockjock I think you need some financial advice from an expert, or at least read about it.

If you want your children to inherit and you need up in a care home, they will inherit nothing as most care homes are £50K pa as you know.

If, at least 7 years before you need care, your children receive gifts of money, then you will reduce your assets.

You need a financial advisor to help you understand inheritance planning.

Also, last night you were having a go (at me) or anyone , helping out their children, saying you didn't want to benefit from hand outs yourself and preferred to stand on your own two feet. yet today you are saying you would give your children a house deposit etc.

@Liverbird77 You are completely misunderstanding.

IHT kicks in once the whole value of the estate is added up when the person dies. The current allowance is £325K per person but when a spouse dies their portion is added on so the remaining spouse had a total of £650K.

IHT would be paid on anything over that once expenses are taken off it.

Paying for care is slightly more complicated than you suggest jinglinghellsbells. There are very few 'council run' care homes. Councils buy places in private homes. The 23k limit is for care at home. If you go into a care home in England with more than £14,250 in capital, you will be asked to contribute to the cost of care until you spend down to £14,250. The rules are slightly diffferent in all the UK countries - in Scotland you pay for 'hotel' costs but not for care. Also, if a spouse or dependent is living in your house the council cannot ask you to sell your home. Some councils will ask people to make a deferred payment agreement in which they will wait until the person in the care home dies before asking for the care home fees. Others apply what they call a property disregard. It is a huge problem that so few people understand the costs of care and how the situation can vary from council to council and across the UK. There is good advice on the Age UK website but some people will need specialist advice before making any decisions.

I interpreted the Gov.uk advice on gifts the same way as Liverbird so if we are both wrong, perhaps it could be worded more clearly?

I am not sure if those wanting to blame the FIL are being reasonable.
There was £200k that was available to the the MIL that he may have been aware of. How was he to know that situation would fall as it did.

@nettie434 I think we are right. I was given a large deposit for our last home purchase and it all had to be recorded formally on the insistence of the solicitor because of this reason.

Make sure your kids get a decent education and learn to stand on their own two feet and have a good work ethic - that’s the best you can give them, not money.
Then hopefully they won’t be on MN whining about not being given their ‘inheritance’ early...

Liverbird77 I agree. I would have thought that otherwise it would create an anomaly in which children whose parents gave them over £325k in the 7 years before their parents died would be better off than children whose parents died without gifting £325k plus and whose children then had to pay inheritance tax.

All theoretical in my case. I always say I inherited nothing except my genes

@nettie434 Don't have the time or inclination to write about care homes and fees in detail. It was the principles. had relatives in them, mum has a best friend in one now, the general stuff I posted is right.
Mum's friend ran out of cash they allow her to stay with council paying and part of her pension. Ditto a friend' s mum.